Manufacturing In The Netherlands

The Netherlands’ record of sound economic policy and steady growth has been universally acclaimed as the “Dutch miracle” by ratings institutions, European Union neighbors and investors alike. A founding member of the European Union, and qualifying participant of the European Monetary Union (EMU), the Netherlands has simultaneously managed to maintain a budget surplus, while cutting down on government spending and reducing unemployment. The Netherlands has also taken a central role in the formation of the EMU, a role that is validated by the longstanding stability of the Dutch guilder.

Structural reforms since the 1980s have earned the Netherlands its recognition as a strong, internationally oriented economy, fostered by the tradition of intensive negotiations between the trade unions, business community and the government. Consequently, in 1998 the Netherlands was ranked as “The No.1 Place to Do Business - 1999-2003” by the Economist Intelligence Unit (EIU). The Dutch lead is a result of strong performance across all categories. According to the EIU Report, the score factored in Holland’s political and macroeconomic stability, educated labor, developed financial sectors, and advanced physical infrastructures. The gain in the Dutch position was also attributed to greater labor market flexibility (including dismantling of some wage regulations), a lowering of corporate and income taxes and further privatization.

The Netherlands was also named “Fourth Most Competitive Nation in the World” (1998 World Competitiveness Yearbook) by the International Institute for Management Development (IMD) in Lausanne, Switzerland. The report measures the “competitiveness” of 46 countries by weighing 259 criteria ranging from liberal trade policies to economic strength, and from venture capital raising to the number of Nobel Prize winners. Rated No. 1 in Europe, the Netherlands’ strong showing was due to the fact that the country has “managed to blend its global banking and telecommunications prowess with local reforms that stress worker flexibility,” according to Stephane Garelli, director of the annual project. “The reforms have shown the rest of Europe that you don't have to be Anglo-Saxon to strip regulation and create a dynamic workforce.”

“Highly Productive” is yet another of the Netherlands’ titles, assigned by the Organization for Economic Cooperation and Development (OECD). Based on an annual working paper on labor productivity and unemployment levels, the Netherlands continues to achieve top ranking in trying to reduce structural joblessness with prudent economic policy. The Netherlands is the only country in Europe where the unemployment situation has not been negatively impacted in the move towards monetary integration.

Holland’s leading manufacturing position has attracted over 1,850 North American companies, including a third of the Fortune 500, for manufacturing operations. Companies cite the Dutch distribution infrastructure, proximity to a wide range of markets and technical sophistication as crucial determining factors for their manufacturing operations.

As evidence to Holland’s integral role as a European manufacturing hub, Dutch manufacturing sales reached an all-time high in 1997 (the latest year for which records are available), topping U.S. $158 billion. This amounts to a 9% rise over the 1996 record. Other assets that contribute to making the Netherlands a clear choice for manufacturing facilities are leadership in technology, availability of materials, and a workforce that is highly educated, productive and flexible.

Ceramic manufacturers in Holland include Royal Philips Electronics, a manufacturer of semiconductors and discrete and ferrite ceramic components for electronic applications; and N.V. Koninklijke Sphinx Gustavsberg, a leading European supplier of fixtures for bathrooms and other sanitary facilities.

Editor's Note

The above information was obtained from the Netherlands Foreign Investment Agency. For more information, e-mail info@nfia.com, or call 312-616-8400.